Insurance when buying a house

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Do I need insurance when buying a house?

Although you’re not legally required to have buildings or contents insurance, a mortgage lender will usually insist you at least have adequate buildings cover. And it will protect you should anything happen to the property.

There are other types of insurance you might want to think about too, including specialist home buyers protection insurance that can help if the moving process falls through.

When buying a house, what insurance should I consider?

Buildings insurance

This covers the bricks and mortar of your home, along with any permanent fixtures and fittings, such as kitchens and bathrooms. You’ll need enough buildings insurance to cover the cost of rebuilding your house from scratch, which isn’t the same as the market value of the property – it’s usually less. But with the cost of building work and materials increasing, you need to make sure you’re insured for the right amount. When you get a quote with us, we can help you work out the rebuild value of your home.

Contents insurance

This will cover your possessions once you’re in your new home. It usually includes furniture, home appliances, clothes and carpets. If you’re downsizing and taking fewer possessions with you, you might find that you need less insurance when you add up the value of your contents. If you’re moving to a bigger property and end up buying new stuff, you may have to increase the level of contents cover.

Goods in transit insurance

You’ll want to protect your possessions when they’re being moved to your new home. If you already have contents insurance, check whether your policy covers your belongings while they’re in transit from your old house to your new one. Some policies include this as standard but might only cover you if you use a professional removal company. If your policy doesn’t include this cover, you may be able to add it for an extra cost.

It’s also worth checking what cover your possessions will have if you’re putting them in storage.

What insurance will I need if I have a mortgage?

If you have a mortgage, you might want to consider insurance that can cover your repayments if you’re unable to make them.

Mortgage protection insurance

This can cover your mortgage payments if you lose your job through no fault of your own or are unable to work because of illness.

Compare mortgage protection insurance

Life insurance

Can be used to clear your debts, including your mortgage, if you’re no longer around. Your mortgage provider may insist you have life insurance in place as a condition of their mortgage offer.

Compare life insurance

What is home buyer protection insurance?

Home buyer protection insurance offers cover if your house purchase falls through. It allows you to claim back some upfront costs, such as valuation, mortgage and conveyancing fees (up to certain limits). This is a specialist standalone policy and isn’t part of a home insurance policy. We don’t compare home buyer protection insurance at Comparethemarket.

What are the benefits of home buyer protection insurance?

Home buyer insurance can be particularly helpful when the market is very competitive and there’s a risk your purchase could fall through. With up to one in three property sales falling through in the last three months of 2022, according to property experts, this type of insurance can help mitigate any financial losses.

A house sale can break down for a variety of reasons, such as:

The seller changing their mind
The seller selling to a higher bidder after accepting your offer. This is known as gazumping
The mortgage lender valuation is lower than the accepted offer
Rectification work is required by the mortgage lender
You’re made redundant or are relocated by your employer.

With uncertainty in the housing market because of rising interest rates and the cost of living crisis, house buying insurance could provide a degree of peace of mind – particularly for those on tight budgets.

What won’t home buyer protection insurance cover?

House buying insurance typically won’t offer cover if:

The property valuation is more than 90% of the accepted offer (the percentage may vary among insurance providers)
The sale fell through because of delays you caused or you changed your mind
You didn’t instruct a solicitor
You take voluntary redundancy.

When do I need to have home insurance in place?

You become responsible for your new home the day you exchange contracts, so your buildings insurance needs to be in place from that date onwards. If you already own a property, you might need insurance for both properties if there’s a period when you’re responsible for both your old and new home.

You may want to update and transfer your existing home insurance policy to your new home. But moving could also be an opportunity to compare home insurance quotes with us and find a better deal.

Be aware, though, that if you change your insurance provider partway through your policy, you may be charged a cancellation fee. But it’s still worth getting a quote to see whether any saving you’d make from switching providers makes the cancellation fee worthwhile.

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Frequently asked questions

Do I have to buy home insurance through my mortgage provider?

No, your mortgage provider might suggest you take out their own buildings insurance, but you don’t have to. You can choose any home insurance provider – and it’s worth shopping around to get the most suitable deal.

However, mortgage lenders can make having buildings insurance a condition of offering you a mortgage, so you may need to show your lender you have a policy in place.

How much buildings insurance do I need?

When working out how much buildings insurance you need, you should base it on how much it would cost to rebuild your home, not its market value. We have a calculator to help you do this when you get a quote with us.

Do I need home insurance when buying a leasehold property?

If you’re buying a leasehold property, you may find that the freeholder is responsible for buildings insurance – but check the terms of your lease to be sure. If this is the case, you’ll usually need to make a contribution towards the cost through a service charge.

The freeholder won’t be responsible for contents insurance, so you’ll need to get this if you want cover for your possessions.

Is it worth getting contents insurance when buying a home?

It certainly can be. Without contents insurance, you’ll have to pay to replace your possessions if they’re damaged, lost or stolen.

Should I get combined buildings and contents insurance?

It can often work out cheaper to get buildings and contents insurance under one policy rather than take out separate ones. It’s also more convenient if you need to make a claim.

But you should always compare quotes to make sure combined cover is the right option for you.

Can I transfer my existing home policy?

Yes, you can transfer your home insurance but your premiums may go up or down depending on the property you move to.

What home insurance add-ons can I get?

You might want to consider:

Just remember that add-ons typically increase the cost of your premium.

Do I need buildings insurance for a new-build home?

Although some newly built properties come with a warranty, you’ll still need insurance to cover your new-build against flooding, fire, water leaks or subsidence.

Do I need buildings insurance if I’m buying a house without a mortgage?

You’re not obliged to take out buildings insurance if you’re buying a property outright. But it could protect you from potentially huge costs if your house is damaged or even destroyed: for example, by a fire.

When might I need specialist home insurance?

You’ll typically need specialist home insurance for a non-standard property. For example, if you’re buying a Grade II-listed house or a cottage with a thatched roof.

Other types of specialist home cover include:

Landlord insurance – if you’re buying a property to rent out to long-term tenants or as a holiday let.
Unoccupied property insurance – if you’re planning on renovating your home before you move in and it’s likely to be empty for a while.
Holiday home insurance – if you’re buying a second property to use as a holiday home.

How much does home insurance cost?

Buildings insurance could cost less than £142 per year^[1]

Contents insurance could cost less than £67 per year^[2]

Combined buildings and contents insurance could cost less than £174 per year^[3]

The cost of home insurance is determined by a number of factors. With buildings insurance, the price is calculated according to how much your house would cost to rebuild, plus your postcode among several other factors.

With contents insurance, the value of your possessions and where you live are also taken into consideration. In both cases, whether you’ve made claims in the past will likely be taken into account.  

^[1] 51% of our customers were quoted less than £141.60 for their buildings home insurance in June 2023.
^[2] 51% of our customers were quoted less than £66.99 for their contents home insurance in June 2023.
^[3] 51% of our customers were quoted less than £173.53 for their buildings and contents home insurance in June 2023.